Storm in a coffee cup: Starbucks defends itself over Oxfam campaign

Starbucks, the US coffee giant, yesterday hit back at critics who have accused it of not doing enough to help coffee growers in poor countries.

The group said it had sharply increased the average price it paid for its coffee last year. But it acknowledged it had not reached any agreement with Ethiopia over a trademark dispute which has prompted thousands of people around the world to write in protest to the company's chief executive, Jim Donald.

Starbucks said it had raised the average price it paid for coffee in its fiscal year to last October to $1.42 (72p) a pound, 37% above the industry coffee price over the period and 11% more than it had paid in 2005.

It also said it had doubled to 155m lbs the amount of coffee it bought through the independently verified coffee sourcing and purchasing guidelines known as CAFE. This type of coffee now accounts for 53% of all the company's coffee.

The company's coffee bill was about $426m last year. Over the same period the its revenues surged 22% to $7.8bn.

"We are passionate about coffee but we are also passionate about the wider coffee-growing community and the leadership role we play," said Alain Poncelet, managing director of Starbucks Coffee Trading Company, which buys the company's coffee from 26 countries.

Mr Poncelet told the Guardian he thought the new price Starbucks was paying was the highest it had ever paid.

Starbucks has been stung by accusations from the charity Oxfam and the Ethiopian government late last year that it was indirectly blocking an attempt by the impoverished African nation to register the trademarks of its key coffee brands in the US. Around 90,000 people have written to Mr Donald to complain as a result of Oxfam's campaign.

Starbucks has recently put out a video on the website YouTube in which it says it would be illegal for the Ethiopians to trademark their beans Sidamo and Harar in the US since they are geographical regions which cannot be trademarked there. But that is disputed by trademark lawyers.

Mr Poncelet said he would hold further talks with the Ethiopian government in Addis Ababa next month but would not outline what any deal might be. Similar talks in November did not lead to a deal. "Our goal is to reward Ethiopian coffee farmers for the great coffee they produce," he said. He would not say how much money Starbucks spent in Ethiopia but its coffee represented only about 2% of the company's purchases.

Phil Bloomer, director of campaigns at Oxfam, said he recognised the efforts Starbucks had made in ensuring an increasing ethical commitment in its purchasing.

"But this latest PR offensive merely skirts around the real issue. Trademarking coffee names would help level the playing field in international trade and allow coffee farmers to trade on more equal terms with their suppliers.

"Starbucks ... has tied the hands of Ethiopian farmers who produce world-famous coffees, but who are prevented from taking full advantage of this to help work themselves out of poverty."

Ron Layton, head of Light Years IP, a Washington-based intellectual property rights organisation advising the Ethiopian government, said Ethiopia had already trademarked Yergacheffe coffee in the US and there was no legal reason it should not be able to trademark Sidamo and Harar.

"Currently they are able to get maybe $1.42 a pound for their coffee when Starbucks sells it for up to $26 a pound."